New mortgage programs

The Home Affordable Refinance Program HARP was created in the wake of the housing crisis as a way for homeowners with little or no equity to refinance. Fortunately, home values have been increasing steadily in recent years.

And the number of underwater homeowners has fallen sharply. HARP expired in Since then, other programs have been created to help homeowners refinance with little or no equity. Even homeowners who had no equity or were underwater in the past might be refi eligible thanks to the enormous spike in home values nationwide.

Contact a lender to check your equity levels and find out whether you qualify for a refinance. The biggest benefit is that qualifying borrowers can refinance into a lower interest rate and monthly payment, helping them afford housing costs and avoid foreclosure. These loans remove many of the eligibility requirements for a conventional refi. This loan is for homeowners with high loan-to-value ratios.

The FMERR program is open to homeowners with second homes and investment properties as well as owner-occupied homes. And, you can use it to refinance a home with one, two, three, or four units. For comparison: In , the average was 4.

In , it was 6. Despite the overall boom in refinancing last year, there was a drop in activity among homeowners whose earnings fall below their area's median income , said Sandra Thompson, acting director of the Federal Housing Finance Agency, at a Mortgage Bankers Association convention in October. She also said in her speech that take-up of the two refi programs has been slower among some larger lenders.

The new changes incorporate some of the feedback received about how the programs could be modified to be more effective. To be eligible for RefiNow, borrowers must first have a Fannie Mae-backed mortgage for their house, which they must live in. Households whose earnings are not above their area's median income are generally eligible if they can meet some other requirements. Freddie Mac's initiative will raise the limit in January as well as incorporate some other announced changes.

The RefiNow program also eliminated the requirement that the loan could not be older than 10 years. A cap on closing costs also was removed, and payment reduction can be of any amount instead of a minimum. However, lenders must provide a rate cut of at least 50 basis points half a percentage point. Some of the questions include if the state in which you're applying for assistance is your primary residence and whether you own your home. You can also expect to answer whether have you suffered financial hardship associated with the pandemic after January 21, That's because applications are usually processed in the order they were received, and your state may not have enough funds to help everyone in need.

If and when your application is approved, the funds are typically sent directly to your mortgage lender and other providers. Plus, we explain how to lower mortgage payments as interest rates rocket. Email us at exclusive the-sun. Like us on Facebook at www.